CONCORD COALITION SAYS THAT SOCIAL SECURITY
AND MEDICARE TRUSTEES REPORTDESERVES ATTENTION ON THE CAMPAIGN
TRAIL

WASHINGTON -- With today's release of the annual Social Security
and Medicare Trustees' Reports confirming the unsustainable outlook for
the federal government’s two largest programs, The Concord Coalition urged
presidential candidates to make long-term fiscal policy reform one of their
top priorities.

"This report should be required reading on the campaign trail. Anyone
who is serious about becoming our next President must be prepared to confront
the long-term fiscal challenge and be willing to lead a national dialogue
on how to deal with it," said Robert L. Bixby, Executive Director of The
Concord Coalition.

"It is understandable that Democrats and Republicans will have different
perspectives on the specifics of any reform plan. This report demonstrates,
however, that the first step is to reject the ‘Do Nothing Plan.’ The debate
should be about realistic options, not about who can promise the most without
asking anyone to give anything up. In effect, those who pledge not to consider
any benefit reductions or new funding are pledging to stand by and watch
as Social Security and Medicare go over a fiscal cliff." Bixby said.

According to the Trustees report, the cost of Social Security and Medicare
will roughly double from 7 percent of the economy today to 14 percent by
2040. To put that number in context, if the federal government spent 14
percent of GDP on these two programs today they would consume about 80
percent of all revenues.

Despite the attention focused on when the Social Security and Medicare
Part A trust funds become "insolvent," The Concord Coalition again warned
that trust fund solvency is a poor indicator of the fiscal outlook for
these programs.

"The magnitude of our long-term fiscal challenge should not be minimized
by trust-fund accounting. This indicator not only misleads the public about
the timing and magnitude of the looming fiscal burden, it says nothing
about these programs' impact on national savings and generational equity.
Trust fund solvency also says nothing about how society will meet the growing
fiscal burden reflected in these projections. Because the trust funds are
primarily an accounting device for keeping track of the programs' claims
on general revenues, their existence does not ease the burden of paying
future benefits," said Bixby.

"These programs must not be viewed in isolation, either from each other
or from the overall federal budget. What matters fiscally and economically
is their combined total cost. Reform efforts will need to either reduce
costs or raise revenues to pay for them. Those are the choices that must
be confronted," Bixby said.